“The transition to sustainability is the strategic challenge sovereign bonds face in the 2020s. Overcoming this challenge requires that the financial system recognises the fundamental economic dependencies on nature, which are currently ignored and mispriced, storing up instabilities for the future.”

[COMMENTARY]The authors of this reportprovide insight into the possible headwinds and opportunities for sovereign debt. They make a strong case that both countries and investors have to be aware that the role of a country’s natural resources and how they’re utilized will play a major role in the pricing of that country’s debt.
The sovereign transition to sustainability: Understanding the dependence of sovereign debt on nature, February 5, 2020, Grantham Research Institute on Climate Change and the Environment, LSE, UK.